If you're in Debt, Follow these Steps

If you're in debt, and many are these days, digging yourself out probably seems impossible. As a matter of fact, most American's that find themselves in this position don't think they'll ever be able to pay off what they owe. The good news is that this usually isn't the case and the following tips we found on a Discountrue – a coupons service, will teach you how to get out of debt and never go back again.

Stay Organized and Know Who and What You Owe

You need to purposefully organize your life to be successful at getting out of debt and stay that way. You need to come up with a plan to pay off your debt and manage your money and you need to put it in writing; think of it as a financial journal.

Financial organization starts with tracking the income and outflow of your money. Once you have a handle on how much you earn, spend and owe, you can establish a budget to help you manage your finances. Now, for an attitude adjustment; don't think of following a budget as a bad thing. Sticking to a budget will provide you with a huge sense of relief. It's great to know that you actually have enough money to pay for your groceries or other purchases at checkout.

Create a Cash Flow Calendar

Once you know your total debt, come up with a cash flow calendar and keep track of how much money is going in and out of your bank accounts and when. For some reason, people avoid doing this, probably because living in denial seems easier. The important thing to keep in mind is how great it's going to feel once you get out of debt.

Spend Cash Not Credit

Studies have shown that when people use gift certificates and credit cards when shopping, they are far more likely to make impulse buys on luxury items, mainly because they feel like they're using free money. If this describes you, cut up your credit cards now. People who spend cash instead of using credit generally save 20% over their credit card spending. Even more impressive, cash spenders usually don't feel deprived either because using cash results in a heightened sense of "financial" awareness. Suddenly something clicks and makes you feel better about not buying an impulse item you didn't really need.

Reduce Your Rates

Contact your lenders and request that they cut your interest rates and a great way to do this is to request a balance transfer. A lot of credit card companies today offer special promotions of 0% interest for a year or more if you'll transfer your credit card debt from an old card, usually only requiring a small fee. You can save a substantial amount of money by reducing your rates this way.

If You Need Help, Ask for It

If you find that you can't afford to keep up with the payments you owe or taking on additional debt, you more than likely need the professional help of a credit counselor. Credit counseling is particularly helpful if you're struggling with medical or student loan debt. Look for a nonprofit credit counselor through the Association of Independent Consumer Credit Counseling or the National Foundation of Credit Counseling agencies. In most cases, financial counseling is free, although some agencies charge an enrollment fee for debt management plans which can consolidate debt into one payment with a more realistic interest rate,

You don't need to feel hopeless about your situation because you can eventually get out of debt if you're determined to do what it takes, including these and other strategies listed on Discountrue and other savings websites.

If you're in Debt, Follow these Steps
Reviewed by Liz
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